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Brazil's BNDES returns after a decade to the equities markets
The Brazilian state development bank BNDES said Monday that it will restart investments in equities following a nearly decade-long pause. It hopes to spend at least $5 billion reais (907.13 million dollars) this year in the "green" economic sector. The bank's investment arm BNDESPar will distribute the funds, according to the statement. BNDES plans to invest an additional 5 billion reais through investment funds. However, it did not give a timeframe for these investments. In a press statement, the bank stated that this move came after almost 10 consecutive years of no new direct investment from BNDES. "A long period focused primarily on massive divestment" and portfolio demobilization was also a part of their strategy. BNDES was once known for its massive funding of some of Brazil's biggest firms, such as oil giant Petrobras. The Development Bank of Canada announced its latest development last month. Trimmed its stake JBS has increased its share of the market to 18%. BNDES also has stakes in the planemaker Embraer and oil company Brava, as well as the logistics firm Hidrovias do Brasil. Its portfolio includes private companies, investment funds, and debentures. Aloizio Mercadante, the head of BNDES, said that the Lula government was resuming BNDESPar’s mission to strengthen the capital market and develop the country. This is a return to Lula’s strategy from 2003 to 2010. BNDESPar is a portfolio of 53 mutual funds with 8 billion reais committed capital, and an additional 27 billion reais from other investors, such as equity and credit funds. Mercadante stated that the new investments will be made to all companies, regardless of size, and will focus on decarbonization as well as green transition, innovation and other areas. It said that the bank could participate as an anchor investor in public offerings, acquiring up to 30 percent of smaller companies seeking to enter the capital markets for the first. However, it also had the option to engage in private deals.
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Wall St. ends with a higher price as hopes of rate cuts offset fears of an escalating conflict with Iran
Wall Street rose on Monday, as the prospect of the U.S. Federal Reserve reducing interest rates by as early as July offset concerns that Iran could disrupt crude transportation in the Middle East. All three major U.S. indexes ended the day higher. The consumer discretionary sector led the gains, with Tesla providing a strong boost. "The rally was a little surprising," said Jay Hatfield. He is the CEO and portfolio manager of InfraCap, a New York-based company. In a sense, the U.S. attacks have ended the uncertainty about whether or not the U.S. would attack. Hatfield said, "The market is very bullish at this time of the year because we are supposed to see a pullback in June." "People don't want to sell on this market." Michelle Bowman, Vice Chair of the Federal Reserve, said that it was time to adjust the policy rate as the risks on the job market outweighed inflationary concerns relating to tariffs. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said that tariffs had so far had a smaller economic impact than anticipated. The financial markets expect at least two rate cuts of 25 basis points before the end of the year. It is expected that the first rate cut will occur in September. Paul Nolte is a senior wealth advisor & Market Strategist at Murphy & Sylvest, located in Elmhurst in Illinois. Powell's "wait and see" is probably a good tactic. But, of course, markets love lower interest rates. Tesla shares soared following the launch of its robotaxi service in Austin Texas. Israel continued to bomb Iran a day after the U.S. entered the war. Oil prices fell despite Iran's refusal to take action against oil and gas tanker traffic in the Strait of Hormuz. Tehran had threatened to close the Strait of Hormuz - a vital oil shipping route. Nolte stated that "the markets read this as saying 'hey we're success,'" we destroyed their nuclear capability and were able support any counterstrikes. "I believe there was much concern that Iran would act more aggressively than it did." S&P Global’s "flash" advance purchasing managers' (PMIs) indexes showed that the U.S. economic expansion is accelerating at a faster pace than analysts expected. Separately, despite the pressure of high borrowing costs, new home sales posted an unexpected increase in May. The Commerce Department's final assessment of first-quarter GDP, its Personal Consumption Expenditures and Fed Chair Jerome Powell’s congressional testimony will likely be analyzed for clues about the near-term direction of monetary policy. Preliminary data shows that the S&P 500 rose 57.20, or 0.96 percent, to 6,025.04 while the Nasdaq Composite grew 183.98, or 0.95 percent, to 19,631.39. The Dow Jones Industrial Average grew 373.48, or 0.88% to 42,580.30. Fiserv shares soared after the company announced that it was launching a digital asset platform. Northern Trust has jumped in response to a Wall Street Journal article stating that Bank of New York Mellon had discussed a possible merger. Super Micro Computer, a maker of AI-servers, dropped its stock after it announced that it would be issuing a private offer of convertible bonds for five years worth $2 billion. Later this week, Nike, a sportswear firm, and FedEx - a package delivery company - will release their quarterly results.
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Louis Dreyfus will reopen a rival's former grain terminal in Indiana
Louis Dreyfus Company, based in Rotterdam, announced on Monday that it will reopen an abandoned U.S. grain terminal in Burns Harbor Indiana, at the southern end of Lake Michigan, in early 2026. This will provide the global commodities trader with export market access through the Great Lakes Seaway and St. Lawrence Seaway. The facility, built in 1979 by Cargill, a rival grain merchant, has been closed since 2023 when it ceased operating there because of difficult market conditions. Privately-held Dreyfus is the "D" in the ABCD quartet of global grains trading giants, along with Cargill, Archer-Daniels-Midland and Bunge Global. The global grain glut and weak demand have eroded profits for all four companies. The Burns Harbor terminal can load grain ships up to 30,000 metric ton capacity at a rate of 90,000 bushels per hour. This is about half the size compared to larger terminals in the U.S. Gulf Coast or Pacific Northwest. Dreyfus stated that the facility has a storage capacity of 7.2 million bushels, 200 rail cars, and 20 barges. Burns Harbor, located on the southern shores of Lake Michigan and with easy access to regional grain markets, is a well-positioned port. LDC will use the port to increase market access for local farmers, and serve customers throughout North America and beyond," said Gordon Russell, Dreyfus' head of grains and oilseeds. The terms of the agreement with Ports of Indiana was not disclosed. The Great Lakes System exports are a small part of the total U.S. agricultural trade, valued at $176 Billion last year. Most of the crop exports leave the U.S. Gulf Coast and Pacific Northwest. According to U.S. Department of Agriculture data on export inspections, exporters have only shipped about 125,000 metric tonnes of corn and wheat this year after shipping around 1.06 million tons of soybeans, corn, and wheat at its ports in the previous year.
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Wall St. rallies on hopes of rate cuts outweighing Middle East turmoil
Wall Street gained on Monday, as fears of Iran retaliating against U.S. Airstrikes and escalating the Middle East war were offset by the prospect that the U.S. Federal Reserve would cut interest rates in July. All three major U.S. indexes rose modestly as a result of a broad rally. The consumer discretionary sector led the gains, with Tesla providing a strong boost. "The rally was a little surprising," said Jay Hatfield. He is the CEO and portfolio manager of InfraCap, a New York-based company. In a sense, the U.S. attacks has ended the uncertainty about whether or not the U.S. would attack. Hatfield said, "The market is very bullish at this time of the year because we are supposed to see a pullback in June." "People don't want to sell on this market." Michelle Bowman, Vice Chair of the Federal Reserve, said that it was time to adjust the policy rate as the risks on the job market outweighed inflationary concerns relating to tariffs. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said that tariffs had so far had a smaller economic impact than anticipated. The financial markets expect at least two rate cuts of 25 basis points before the end of the year. It is expected that the first rate cut will occur in September. Tesla shares surged following the launch of its robotaxi service, which was long anticipated in Austin, Texas. Shares of the electric vehicle manufacturer were up last by 9.4%. Israel continued to bomb Iran after the U.S. entered the war. Still, Oil prices fell after Iran's response did not include actions to disrupt oil and gasoline tanker traffic in the Strait of Hormuz. Tehran had threatened to close the Strait of Hormuz - a vital oil shipping route. S&P Global’s "flash" advance purchasing managers' (PMI) indexes showed that the U.S. economic expansion is a little faster than analysts expected. Separately, despite the pressure of high borrowing costs, new home sales posted an unexpected increase in May. The Commerce Department's final assessment of first-quarter GDP, its Personal Consumption Expenditures and Fed Chair Jerome Powell’s congressional testimony will likely be analyzed for clues about the near-term direction of monetary policy. The Dow Jones Industrial Average gained 305.71, or 0.72 %, to 42512.53. The S&P 500 rose 44.70, or 0.75 %, to 6,012.54. And the Nasdaq Composite added 177.08, or 0.91 %), to 19,624.49. Consumer discretionary stocks were the top gainers among the 11 major S&P 500 sectors, with energy being the only one in the negative. Eli Lilly's shares rose by 0.9%, among other companies that moved the market. Investors were not impressed with detailed trial results on Novo Nordisk’s experimental drug for obesity CagriSema. Novo Nordisk's shares dipped 5.3%. Fiserv's share price rose by nearly 3,3% after the company announced that it was launching a digital asset platform. Northern Trust's stock jumped 7.2% following a Wall Street Journal article that said Bank of New York Mellon had discussed a possible merger. Super Micro Computer, a maker of AI-servers, dropped 6.8% following the announcement of a private offer of convertible bonds for ten years worth $2 billion. Later this week, Nike, a sportswear company and FedEx, a package delivery company will release their quarterly results. On the NYSE, advancing issues outnumbered declining ones by a ratio of 1.67 to 1. On the NYSE, there were 100 new highs. There were also 66 new lowers. On the Nasdaq 2,389 issues rose, while 2,026 declined. The ratio of advancing to declining stocks was 1.18:1. The S&P 500 recorded 12 new highs for the past 52 weeks and 4 new lowests, while the Nasdaq Composite registered 77 new highs for this period and 105 lows.
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Tesla seeks to keep Texas robotaxi data under wraps, regulator says
According to a letter published on Monday, Tesla informed U.S. regulators its answers on the safety and deployment of its robotaxi in Texas were confidential business information that should not be released. The National Highway Traffic Safety Administration announced on Friday that it was reviewing the answers provided to questions about the safety and reliability of Tesla's self-driving roboticaxi in bad weather. The agency stated on Monday that Tesla is invoking federal law which "restricts NHTSA’s ability to release publicly what the companies call confidential." The agency said that, "after assessing these responses and any other relevant information NHTSA will be taking any necessary action to protect road safety." Since October, NHTSA is investigating collisions between Tesla vehicles that use Full Self-Driving Software in conditions of low visibility. The investigation covers 2.4 millions Tesla vehicles with FSD after four reported accidents, including one fatal accident in 2023. NHTSA stated on Monday that the agency's investigation remains open into Tesla's FSD Supervised/Beta. Tesla says the information it provided to NHTSA was commercially valuable, as competitors could use it for their own automated and advanced driving systems. In a letter to NHTSA, Casey Blaine, Tesla's regulatory senior counsel wrote that "nefarious actors" could use the marked information in order to discredit Tesla for the sake or notoriety. In the absence of public disclosure, accessing the marked information would require significant time and resource expenditures and intimate knowledge of Tesla. Tesla released a small fleet of self-driving cabs to pick up paying passengers on Sunday in Austin, Texas. Elon Musk announced the launch of robotaxis and social media influencers posted videos of their rides. Musk believes that the Tesla EV maker will be able to survive financially if it can attract paying passengers. Tesla shares rose 8% to $347.80 in the afternoon on Monday.
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Turkish Airlines confirms that it has held non-binding discussions about potential Air Europa investments
Turkish Airlines said it was holding non-binding talks to evaluate a possible investment in Spanish airline Air Europa, and explore potential partnership synergies. In a late Friday filing with the stock exchange, Turkish Airlines confirmed that it was considering a bid to acquire a minority stake of Air Europa. The flag carrier stated that it evaluates growth potentials regularly to improve its global position in the aviation sector. Media reports have stated that Turkish Airlines has been in talks to buy shares in Air Europa. In this context non-binding talks are being held in order to assess the potential investment in Air Europa, and to explore possible partnership synergies", the company stated in a statement. Turkish Airlines' consideration is important, since there are very few carriers outside Europe that have bought shares in regional players. Air Europa operates flights within Spain and between Madrid, Europe and Latin America. (Reporting Canan Svgili, Editing Jan Harvey)
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After Iran threatened to retaliate against US strikes, Doha in Qatar heard explosions
Witnesses reported hearing explosions over Qatar's capital Doha, just hours after a Western diplomatic official said that there was a credible Iranian threat to the U.S. run al Udeid Air Base in the Gulf Arab State since noon. The diplomat's remarks came shortly after Qatar announced that it had temporarily closed its airspace to ensure the safety for residents and visitors. The U.S. Embassy in Qatar advised Americans earlier to shelter in place out of "overwhelming caution". Iran has threatened to retaliate after U.S. aircraft dropped 30,000 pound bunker busters on Iran's nuclear underground installations at the weekend. Meanwhile, President Donald Trump raised the possibility that the Iranian government could be overthrown. Israel had struck earlier on Monday a prison for political prisoners located in Tehran, a powerful demonstration of its expanding targets beyond nuclear and military sites. Its aim was to strike at the very pillars that support Iran's ruling regime. Two U.S. officials have said that Washington believes Iran will soon launch attacks against American forces in the Middle East, but the U.S. still seeks a diplomatic solution that would allow Tehran to forgo any retaliation. Oil prices were largely unchanged despite Iran's threat to disrupt oil shipments out of the Gulf. This suggests traders did not believe the Islamic Republic was serious about any action which would disrupt global supply. In Moscow, Iranian Foreign Minister Abbas Araqchi and Russian President Vladimir Putin met to discuss Tehran's next moves.
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Qatar shuts down airspace; US and UK warn citizens to shelter in Place
Qatar announced on Monday that it had temporarily shut down its airspace, after U.S. authorities and British authorities advised their citizens to shelter in place for the time being. Iran reiterated earlier threats of retaliation against the U.S. following strikes on its nuclear site. Al Udeid Air Base is the largest U.S. military base in the Middle East. It serves as the headquarters of the U.S. Central Command, and houses approximately 10,000 troops. Two U.S. officials told separately that Iran could launch attacks against American forces in the Middle East in the near future, one source stating it could occur in the next two days. The messages sent by the British and U.S. embassies in Qatar stated that their recommendations had been made "out of a great deal of caution", and provided no additional information. Qatar's Foreign Minister said on X, that Qatari airspace will be closed in response to developments in the area. He did not go into more detail. Majed al Ansari, the spokesperson for Qatar's foreign ministry, had earlier released a press release stating that security conditions in Qatar remained stable. Qataris were confused about what they perceived as mixed messages from Qatari officials and U.S. Embassy officials. After the announcement by the Embassy, American universities in Qatar sent a message to their staff and students. Northwestern University told people to leave and Georgetown University allowed people to return home. The American School has closed its campus until further notice. Reporting by Andrew Mills, Tala Ramadan and Maha El Dahan. Writing by Mahal Dahan. Editing by Kevin Liffey and Aidan Lewis.
EU seeks to end remaining Russian gas ties but legal options are limited
The European Union is expected to announce on Tuesday a roadmap for the phase-out of the remaining gas ties between the EU and Moscow. However, in the absence sanctions, it will be hard for gas buyers to terminate contracts by using legal options like force majeure.
A spokesperson for the Commission confirmed Monday that EU Energy Commissioner Dan Jorgensen will present the roadmap on Tuesday at Strasbourg. The U.S. has been pushing Russia to reach a peace agreement with Ukraine. The deal, if reached, could reopen doors for Russian energy as well as ease sanctions.
Around 19% (or more) of Europe's natural gas is still imported from Russia via the TurkStream pipe and LNG shipments. The European Union's non-binding target is to stop Russian fossil fuel imports before 2027. This goal will be achieved by the EU roadmap.
A senior EU official said that the Commission is looking at legal options which would allow European companies to break their Russian Gas contracts and invoke force majeure without being penalized, as well measures to prevent companies from entering new contracts with Russian gas.
Analysts and lawyers said that it is unlikely that force majeure will work given that the EU has been committing to stop Russian gas imports by 2022 after Russia invaded Ukraine.
Agnieszka Ason is an independent energy lawyer who specializes in LNG contracts. She said that a force majeure declaration must be made when an event occurs which is unforeseeable and beyond the control of companies. This prevents them from fulfilling their contract. The remaining Russian supplies are working fine after three years of conflict.
"Any deliberate actions that the EU would take already weakens force majeure. Ason, a senior researcher at the Oxford Institute for Energy Studies and a force majeure concept expert, said that the opposite is true.
Experts in the legal field say that sanctions on Russian gas imports are the best way to phase out Russian Gas.
This would require the unanimous approval of all 27 EU member states, but Slovakia, Hungary, and Russia have maintained close business and political ties, with Russia vowing to block energy sanctions.
Since the beginning of the Ukraine war, Gazprom has filed legal actions and counterclaims against European companies for breached contracts and unpaid payments. Calculations based on court documents estimate that these disputes are worth approximately 18.5 billion euro ($21 billion).
Gazprom contracts include a "take or pay" clause that requires buyers who refuse gas deliveries to continue paying for up to 95% the contracted volume.
David Haverbeke of the law firm Fieldfisher said that the EU should help companies to argue that they have changed circumstances since 2022. For example, the risk associated with purchasing Russian gas as opposed to other supplies should be a reason for them renegotiating and possibly terminating their Russian contracts.
He said: "I would try and rely on EU regulations passed since 2023, and invoke hardship on the basis of the changes in regulatory framework."
Haverbeke suggested that another option would be to force companies to purchase Russian LNG in the future via a joint EU buying scheme, and set a maximum volume quota.
(source: Reuters)